US consultancy First Annapolis has highlighted how issuers are feeling heightened pressure to migrate card portfolios to EMV as the October 2015 liability shift deadline quickly approaches.
First Annapolis is highlighting the US EMV push
After a spate of data breaches at major merchants over the past six months, and the recent resolution of the Durbin-related litigation and announcement of cross-licensing agreements among several debit networks for use of a common application identifier (AID), issuers in the US are ramping up EMV migration plans.
According to Casey Merolla, senior manager and member of the deposit access practice at First Annapolis, the strategy of relying on re-issuance cycles is expected to be the norm for issuers across the industry. “Few issuers to date have opted to pursue mass re-issuance, though First Annapolis expects to see a wave of larger financial institutions mass re-issue card portfolios in late 2014 and early 2015,” Merolla stated.
Private-label cards will likely convert at a much slower pace, and be highly merchant dependent. “Given the limited utility of private-label credit cards, the urgency to convert is less immediate and will be driven by merchants’ greater EMV and POS strategies,” Merolla added.
Meanwhile, prepaid card conversion will be highly dependent on segment. First Annapolis predicts that temporary cards, particularly gift cards, will not be issued with EMV capabilities due to the cost and short life cycle of the cards. Government, payroll, and employee benefits cards will likely follow a similar conversion trajectory to debit, driven largely by government and consumer concerns around payment security.
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